EFFECT OF LEVERAGE, LIQUIDITY, FIRM SIZE, SALES GROWTH, AND TANGIBILITY ON PROFITABILITY
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Date
2023-11-23
Authors
Samsuki, Christopher
Journal Title
Journal ISSN
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Publisher
Sekolah Tinggi Ilmu Ekonomi Trisakti
Abstract
The purpose of this study is to describe the effect of leverage, liquidity, firm size, sales growth and tangibility on profitability. This study aims to study, observe, and map out to the readers the effects of these variables on profitability, enabling them to make better informed decisions.
The data used in this research contain the financial ratios calculated from the financial data of Indonesia’s civil engineering and heavy construction subsector over the 7 years for the period 2016 – 2022. This research uses five ratios in measuring the variables. Data analysis tools include descriptive statistics, panel data, data quality test, classic assumption test, and hypothesis testing.
This research found that sales growth has a significant and positive impact on profitability, while firm size, liquidity, leverage, and tangibility have no impact on profitability.
Profitability is measured by ROA, firm size is measured by total asset, leverage is measured by DER, liquidity is measured by CR, tangibility is measured by % proportion of fixed assets, and sales growth is measured by annual growth of revenue.